Investment Idea: MTN

Channel:

PSG Financial Services

Subscribers:

3,840

Published on April 29, 2022 4:56:37 AM ● Video Link: https://www.youtube.com/watch?v=5i-64e_ILmo

Duration: 13:00

325 views

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- MTN reported 2021 full-year results and came in ahead of expectations.
- Outlook: upgraded service revenue in Nigeria and Ghana
- We maintain our buy recommendation, and our decision is influenced by the following:
o 22% upside to MTN’s share price based on a 5.5x multiple.
o We think MTN Nigeria is currently undervalued, given its risk-return prospects. It’s the number one operator with a huge gap between it and the second player in a fast-growing market. Hence, we have a higher valuation versus the current market cap.
o The group is urgently addressing critical issues such as its debt reduction and mix through the asset realisation programme. This supports the high weighting on our bull case in the probability-weighted intrinsic value.
- What would change our minds? Higher regulatory risks and tax hikes could negatively impact free cash flow (FCF) and impede growth prospects.
- For more information about this counter, please contact your PSG Wealth adviser.